News

Consolidated Sales of Olainfarm Reached 122 Million Euros

on February 28, 2018

Consolidated profit and loss calculation of JSC Olainfarm for 2017 shows that with the sales worth 122 million euros the Group has set the new sales record. Sales in 2017 increased by 10% compared to the sales of 2016. The net profit remained at the level of 2016 and was 11.63 million euros.

Board of JSC Olainfarm proposes a dividend of 0.21 euros per share from the profit of 2017. Such a dividend will be possible if audited statements for 2017 do not deviate significantly from unaudited ones.

“Successful operations of the Company in future will largely depend on its ability to diversify its sales markets and products and to preserve its current position in its key markets. In this respect, the Company continues taking all steps necessary to obtain the market authorisations in Turkey, where the first approvals are expected by middle of 2018. The Company may continue acquiring daughter companies in several areas related to pharmaceutical sector, possibly with different sales markets. An important precondition for more efficient operations would be an ability to integrate already acquired companies and optimize the joint administrative, logistics and marketing structure,” says Olegs Grigorjevs Chairman of the Board of JSC Olainfarm.

Sales during the fourth quarter of 2017 shrunk by 1% compared to the same period of 2016 and reached 31.7 million euros. Net income of the group in 4th quarter was 5 million euros, which represents an increase by 32% compared to the fourth quarter of 2016, making this one of the best quarters in terms of profitability.

Relatively the biggest sales increase in 2017 was achieved in Germany, where sales grew by 103%. Sales to The Netherlands grew by 57%, while sales to Belarus increased by 21%. From all the major sales markets of the Group, only sales to Poland, Uzbekistan and Ukraine experienced some reduction. During the entire year of 2017, compared to its first nine years, share of Russia in its total sales increased from 33% to 35%. Share of sales to other countries have remained relatively unchanged. Major sales markets of Olainfarm Group in 2017 were Russia, Latvia, Ukraine and Belarus.

During 2017, new registration processes were completed in Latvia, Kyrgyzstan, Moldova Armenia and Azerbaijan. Registration of several medicines produced by NPK Biotest continue in Belarus has also been completed. Registration processes are still ongoing in Nepal, Armenia, Turkey, Myanmar, Cameroon and Vietnam. Registration of new product Jogurt Actio has started in several markets. New synthesis schemes have been developed for synthesis of anticancer and anti-tuberculosis medicines.

Annual meeting of shareholders of JSC Olainfarm convened on June 1, 2017 approved operating plan of the Group for 2017. According to it, sales of the Group in 2017 are planned to be 127 million euros, but the net profit will reach 15.5 million euros. Because of poor profitability after the third quarter the management reviewed its profit guidance to either 9 million euros or ten million euros, subject to the possibility to reverse the deferred tax liability. According to this report, annual sales target has been attained by 96%, while net profit guidance has been exceeded by 15%.

Condensed Consolidated Statement of Financial Position

Group

31.12.2017

31.12.2016

EUR ‘000

EUR ‘000

ASSETS

NON-CURRENT ASSETS

Intangible assets

37 042

31 860

Property, plant and equipment

42 562

40 943

Investment properties

2 731

1 963

Financial assets

2 704

6 514

TOTAL NON-CURRENT ASSETS

85 039

81 280

CURRENT ASSETS

Inventories

24 710

24 011

Receivables

34 280

36 124

Cash

3 158

3 165

TOTAL CURRENT ASSETS

62 148

63 300

TOTAL ASSETS

147 187

144 580

EQUITY AND LIABILITIES

EQUITY

Share capital

19 719

19 719

Share premium

2 504

2 504

Other components of equity

(79)

322

Retained earnings

76 518

74 081

Non-controlling interests

–

37

TOTAL EQUITY

98 662

96 663

LIABILITIES

Non-current liabilities

Borrowings

15 806

18 800

Deferred corporate income tax

–

3 025

Deferred income

2 347

2 810

Total Non-Current Liabilities

18 153

24 635

Current liabilities

Borrowings

13 890

7 020

Trade payables and other liabilities

16 007

15 769

Deferred income

475

493

Total Current Liabilities

30 372

23 282

TOTAL LIABILITIES

48 525

47 917

TOTAL EQUITY AND LIABILITIES

147 187

144 580

Consolidated statement of comprehensive income

Group

Group

Q4 2017

Q4 2016

M12 2017

M12 2016

EUR ‘000

EUR ‘000

EUR ‘000

EUR ‘000

Net revenue

31 694

32 018

122 078

110 693

Cost of goods sold

(12 389)

(10 850)

(47 240)

(40 855)

Gross Profit

19 305

21 168

74 838

69 838

Selling expense

(11 220)

(10 393)

(38 228)

(31 733)

Administrative expense

(6 653)

(6 156)

(23 525)

(19 735)

Other operating income

848

1 157

2 601

3 080

Other operating expense

(217)

(3 115)

(3 677)

(9 766)

Share of profit of an associate

44

36

114

63

Income from investments in subsidiaries

–

–

–

–

Financial income

22

2 125

237

3 479

Financial expense

(390)

(100)

(2 303)

(307)

Profit Before Tax

1 739

4 722

10 057

14 919

Corporate income tax

2

(252)

(1 804)

(2 883)

Deferred corporate income tax

3 293

(657)

3 379

(450)

PROFIT FOR THE REPORTING PERIOD

5 034

3 813

11 632

11 586

Other comprehensive loss for the reporting period

(119)

–

(119)

–

Total comprehensive income for the reporting period

4 915

3 813

11 513

11 586

Total comprehensive income attributable to:

The equity holders of the Parent Company

4 915

3 815

11 512

11 579

Non-controlling interests

–

(2)

1

7

Basic and diluted earnings per share, EUR

0.36

0.27

0.83

0.82

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company’s operations is to produce reliable and effective top quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 50 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.